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Exploring the Links Between International Business and Poverty Reduction: A Case Study of Unilever in Indonesia

The business activities of multinational companies (MNCs) have an important contribution to make to economic development in developing countries. This contribution is particularly significant because the volume of private capital flows exceeds that of development assistance. International business activities and investments in developing countries have the potential to create positive or negative impacts at several levels for people living in poverty. The extent to which the wealth created by business can reduce poverty is determined by many factors. An industry’s operating structure – and the values and strategies of individual companies within it – are critical factors. Likewise, the opportunities open to people living in poverty, and their negotiating power – as citizens, workers, producers, consumers, and community members – are key determinants in the local context.

This research explores to what extent, and how, the wealth generated by the local operating company of a multinational company in a developing country is translated into poverty impacts in one particular country, in this case Indonesia. The research focuses on Unilever Indonesia, the local operating company of Unilever, one of the world’s leading fast-moving consumer-goods (FMCG) companies. UI has been active in Indonesia since 1933, and the majority of its goods are produced for the Indonesian market.

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